Press Releases

DAG Media, Inc. Reports Fiscal Year 2007 Consolidated Financial Statements

Date: March 17, 2008Â Source: DAG Media, Inc.Â Contact: Assaf Ran, CEOÂ Inbar Evron-Yogev, CFO

NEW YORK, March 17, 2008/PRNewswire/ -- DAG Media Inc. (Nasdaq: DAGM - news)

Dag Media, Inc., announced that net income per common share for the fourth quarter of 2007 was $319,317 or $0.10 per basic and diluted share (based on 3.236 million shares). This income includes an income tax benefit of approximately $183,000, which reflects a change in estimate resulting from changes in prior years’ tax positions.

Total revenue for the year ended December 31, 2007 were $221,000 compared to $10,000 for the year ended December 31, 2006, of which $210,000 represents interest income on short term loans made through DAG Funding.

Loss from continuing operations for the year ended December 31, 2007 was $39,000 compared to a loss of $812,000 for the year ended December 31, 2006. The decrease in loss of $773,000, resulted mainly from interest income from short term notes generated through DAG Funding, a decrease of $68,000 in general and administrative expense, an increase of $143,000 in other income, and an income tax benefit of approximately $183,000 in the fourth quarter of 2007 to reflect a change in estimate resulting from changes in prior years’ tax positions.

For the year ended December 31, 2007 net loss per common share was $(0.01), versus net loss per common share of $(0.05) for the year ended December 31, 2006. The decrease in net loss is mainly attributed to the decrease in net loss from continued operations.

Assaf Ran, Chairman of the Board and CEO stated, “Our significant efforts to pull the company out of losses are turning fruitful. We eliminated operations of all cash draining businesses and are totally focused on building the profitable business of DAG Funding. The turmoil in the financial industry creates opportunities. We work diligently to screen the best ones in order to enhance DAG Funding’s profits while staying away from unnecessary risks.”

“As for Next Yellow, we have completed a business plan and started to contact potential investors in order to raise money on the subsidiary level so we can revive operations of our subsidiary DAG Interactive, Inc.” added Mr. Ran.

DAG Media, Inc. through our subsidiaries provides short term, secured, non–banking, commercial loans, to small businesses. In addition we developed innovative software and a related web site that allows retail businesses and other service providers to reach prospective customers and clients for their goods and services in a more effective way than traditional on-line and print yellow pages search . We operate several web sites: http://www.dagfundingsolutions.com , http://www.nextyellow.com, and http://www.dagmedia.com.

This report contains forward-looking statements within the meaning section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are typically identified by the words “believe,” “expect,” “intend,” “estimate” and similar expressions. Those statements appear in a number of places in this report and include statements regarding our intent, belief or current expectations or those of our directors or officers with respect to, among other things, trends affecting our financial conditions and results of operations and our business and growth strategies. These forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those projected, expressed or implied in the forward-looking statements as a result of various factors (such factors are referred to herein as “Cautionary Statements”), including but not limited to the following: (i) the successful integration of new businesses that we may acquire; (ii) the success of new operations which we have commenced and of our new business strategy; (iii) our limited operating history in our new business; (iv) potential fluctuations in our quarterly operating results; and (v) challenges facing us relating to our growth. The accompanying information contained in this report, including the information set forth under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, identifies important factors that could cause such differences. These forward-looking statements speak only as of the date of this report, and we caution potential investors not to place undue reliance on such statements. We undertake no obligation to update or revise any forward-looking statements. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the Cautionary Statements.

DAG MEDIA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2007

Assets
Current assets:
Cash and cash equivalents	$ 621,724
Marketable securities	802,811
Short term investment – insurance annuity contract – at fair value	931,555
Total cash and cash equivalents, marketable securities and short term investment	2,356,090

Short term commercial notes	4,313,211
Interest receivable on short term commercial notes	41,184
Due from purchaser	156,103
Other current assets	17,083
Total current assets	6,883,671

Property and equipment, net	14,261
Capitalized web development costs, net	74,015
Security deposit	17,515
Investment in privately held company, at cost	100,000
Total assets	$7,089,462

Liabilities and Shareholders’ Equity

Current liabilities:
Accounts payable and accrued expenses	$123,886
Deferred gain from the sale of Jewish Directories	72,917
Deferred origination fee	4,597
Total current liabilities	201,400
Commitments and contingencies (Note 11)
Shareholders’ equity:
Preferred shares - $.01 par value; 5,000,000 shares authorized; no shares issued	--
Common shares - $.001 par value; 25,000,000 authorized; 3,305,190 issued and 3,236,460 outstanding	3,305
Additional paid-in capital	9,180,235
Treasury stock, at cost- 68,730 shares	(231,113)
Accumulated other comprehensive loss	(441,272)
Accumulated deficit	(1,623,093)
Total shareholders’ equity	6,888,062
Total liabilities and shareholders’ equity	$7,089,462

DAG MEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS

ENDED DECEMBER 31, 2007 AND 2006

	2007	2006
Interest income from short term commercial notes	$209,898	$ ---
Origination fees	6,913	---
Subscription revenues, net	4,351	9,885
Total Revenue	221,162	9,885
Operating costs and expenses:
Web development expenses	49,344	137,666
Marketing expenses	8,788	87,955
General and administrative expenses	756,753	824,963
Total operating costs and expenses	814,885	1,050,584

Loss from operations	(593,723)	(1,040,699)
Interest and dividend income	249,053	260,394
Realized gain (loss) on marketable securities	148,777	(45,611)
Write-off of investment in convertible loan	(25,000)	---
Other (loss) income	(400)	14,232
Total other income	372,430	229,015
Loss from continuing operations before income tax benefit	(221,293	(811,684)
Income tax benefit	182,469	---
Loss from continuing operations	(38,824)	(811,684)

Discontinued Operations:
Gain on the sale of the Jewish Directories (net of tax effect of 0 in 2007 and 2006)	267,360	767,939
Loss from operations of Jewish Directories	---	(75,129)
Loss from operations of Shopila (net of tax effect of 0 in 2007 and 2006)	(260,240)	(55,239)
Income from discontinued operations	7,120	637,571
Net loss	$(31,704)	$(174,113)
Basic and diluted net income (loss) per common share outstanding
Continuing operations	$(0.01)	$(0.25)
Discontinued operations	*	$0.20
Net loss per common share	$(0.01)	$(0.05)

Weighted average number of common shares outstanding

Outstanding
- Basic and diluted	3,236,460	3,177,765
* Less than $0.01 per share

DAG MEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

	Common Stock		Additional Paid-in *Capital*	Treasury Stock		Stock Subscription Receivable	Deferred Compensation	Accumulated other comprehensive income (loss)	Accumulated Deficit	Totals
				-		-	-	-	-	-
	Shares	Amount	-	Shares	Cost	-
Balance, January 1, 2006	3,211,190	$3,211	$8,590,174	68,730	$(231,113)	$ (47,400)	$(26,841)	$(403,512)	$(1,417,276)	$6,467,243
Issuance of common stock from exercise of options	4,000	4	5,516							5,520
Services performed for shares issued previous year						47,400				47,400
Non cash compensation			183,012				11,592			194,604
Non cash compensation to related party for service performed			108,846							108,846
Issuance of common stock to related parties	40,000	40	80,560							80,600
Issuance of common stock to Guy Mushkat for Shopila acquisition	50,000	50	70,450							70,500
Options forfeited			(15,249)				15,249			---
Unrealized gain on preferred stocks and other marketable securities								275,917		275,917
Net loss for the year ended December 31, 2006									(174,113)	(174,113)
Total comprehensive income										101,804
Balance, December 31, 2006	3,305,190	3,305	9,023,309	68,730	(231,113)	---	---	(127,595)	(1,591,389)	7,076,517
Non cash compensation			156,926							156,926
Unrealized loss on preferred stocks and other marketable securities								(313,677)		(313,677)
Net loss for the year ended December 31, 2007									(31,704)	(31,704)
Total comprehensive loss										(345,381)
Balance, December 31, 2007	3,305,190	$3,305	$9,180,235	68,730	$(231,113)	---	---	$(441,272)	$(1,623,093)	$6,888,062

DAG MEDIA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

	2007	2008
Cash flows from operating activities: Net loss	$ (31,704)	$ (174,113)
Adjustments to reconcile net loss to net cash used in operating activities -
Gain on sale of Jewish Directories	(267,360)	(481,468)
Loss from discontinued operations of Shopila	260,240	55,239
Depreciation and amortization	53,881	33,520
Non cash compensation expense	156,926	305,848
Write-off of investment in convertible loan	25,000	---
Realized (gain) loss on sale of marketable securities	(148,777)	45,611
Loss (gain) on the sale of fixed assets	400	(14,232)
Changes in operating assets and liabilities net of effects of disposition -
Interest receivable on short term commercial notes	(41,184)	---
Other current and non current assets	21,507	(9,638)
Accounts payable and accrued expenses	(65,818)	108,424
Deferred origination fees	4,597	---
Due from purchasers	---	(125,047)
Income taxes payable	(341,681)	(25,652)
Assets and liabilities from discontinued operations	(112,755)	(171,625)
Net cash used in operating activities	(486,728)	(453,133)

Cash flows from investing activities:
Investment in marketable securities and annuity contract	(1,544,637)	(2,591,432)
Partial redemption of insurance annuity contract	214,360	---
Proceeds from sale of marketable securities	2,814,495	2,628,275
Short term commercial notes made	(4,927,250)	---
Collection received from short term commercial notes	614,039	---
Investment in convertible loan	---	(25,000)
Acquisition of Shopila	---	(107,500)
Purchase of fixed assets	(3,215)	(18,729)
Proceeds from sale of fixed assets	500	9,213
Capitalized web development costs	---	(22,429)
Cash received on sale of Jewish Directories, net of expenses	309,223	309,971
Net cash (used in) provided by investing activities	(2,522,485)	182,369
Cash flows from financing activities:
Proceeds from exercise of options	---	5,520
Dividends paid	---	(314,246)
Net cash used in financing activities	---	(308,726)

Net decrease in cash and cash equivalents	(3,009,213)	(579,490)

Cash and cash equivalents, beginning of year	3,630,937	4,210,427

Cash and cash equivalents, end of year	$621,724	$3,630,937

Supplemental Cash Flow Information:
Taxes paid during the year	$ 212,430	$25,535
Common stock issued to Ocean 7 and in regards to Shopila acquisition	$---	$151,100
Capitalized software acquired through issuance of stock and grant of options	$---	$47,400
Acquisition of company :
Liabilities assumed	---	$(140,000)
Goodwill and other intangibles	---	465,100
Deferred tax liability	---	(67,600)
Minority interest	---	(79,500)
Less – Stock issued	---	(70,500)
Net cash paid	$ ---	$ 107,500